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UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS
GCE Advanced Subsidiary Level and GCE Advanced Level
MARK SCHEME for the October/November 2010 question paper
for the guidance of teachers
9706 ACCOUNTING
9706/21 Paper 2 (Structured Questions Core), maximum raw mark 90
This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the details of the discussions that took place at an Examiners meeting before marking began, which would have considered the acceptability of alternative answers.
Mark schemes must be read in conjunction with the question papers and the report on the examination.
CIE will not enter into discussions or correspondence in connection with these mark schemes. CIE is publishing the mark schemes for the October/November 2010 question papers for most IGCSE, GCE Advanced Level and Advanced Subsidiary Level syllabuses and some Ordinary Level syllabuses.
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Page 2 Mark Scheme: Teachers version Syllabus Paper
GCE AS/A LEVEL October/November 2010 9706 21
UCLES 2010
1 (a) 3810 + 163 100 + 34 000 + 2 680 + 1 200 + 4 100 + 515 + 1 300 = $203 085 Award 1 mark for each correct pair and 1o/f for Total [5] (b) 3 420 + 141 508 + 6 300 + 1 200 + 11 850 + 1 600 140 = $158 898 Award 1 mark for each correct pair except for Drawings which gets 1 mark and Total which gets 1o/f [5] (c)
Clara Coyle Income Statement (trading and profit and loss account)
for the year ended 31 December 2009
$ $ $
Revenue (sales) 203 085 (1of)
Opening Inventory (Stock) 24 170
Ordinary goods purchased (Purchases) 158 898 (1of)
183 068
Less Closing Inventory (Stock) 20 600
Cost of Sales 162 468
Gross Profit 40 617 (1of)
Discounts received 1 600 (1)
1 600
42 217
Less Expenses
Rates 2 800 (1)
General expenses 7 490 (1)
Wages 22 920 (1)
Depreciation 3 000
Discounts allowed 1 300 (1)
37 510
Profit for the year (Net Profit) 4 707
[8]
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Page 3 Mark Scheme: Teachers version Syllabus Paper
GCE AS/A LEVEL October/November 2010 9706 21
UCLES 2010
(d) Clara Coyle
Balance Sheet as at 31 December 2009
Non-Current (Fixed) Assets
$ $ $
Premises 60 000
Fittings 25 000
85 000 (1)
Current Assets
Inventory (stock) 20 600 (1o/f)
Trade Receivables (debtors) 4 100 (1)
Rates Prepaid 240 (1)
Bank 31 332 (1o/f)
Cash 515 (1)
56 787
Current Liabilities
Trade Payables (creditors) 11 850 (1)
General expenses 400 (1)
Wages 1 620 (1)
13 870
Working Capital 42 917
Total Assets less current liabilities 127 917
Non-Current (long term) Liabilities
Loan 10 000 (1)
10 000
117 917
Financed by:
Capital 117 000
Profit for the year (Net Profit) 4 707(1of)
121 707
Drawings 3 790(1)
117 917
[12] [Total: 30]
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Page 4 Mark Scheme: Teachers version Syllabus Paper
GCE AS/A LEVEL October/November 2010 9706 21
UCLES 2010
2 (a)
Subscriptions Account
Balance b/d 400 (1) Balance b/d 300 (1)
Income and Expenditure Account 2800 (1of) Bank / Cash (300 + 2 200) 2500 (2)
Bad debt 100 (1)
Balance c/d 300 (1)
3,200 3,200
[7] (b)
Schubert Music Club Cafe Trading Account for the year ended 31 December 2009
$ $ $
Cafe takings 18 500(1)
Opening Inventory (stock) 4 000 (1)
Purchases (8 400 + 2 200 3 000) 7 600 (2)
11 600
Closing Inventory (Stock) 2 000 (1)
Cost of Sales 9 600
Gross Profit 8 900
Less Expenses
Cafe expenses (4 200 1 200 + 50) 3 050 (2)
Wages Cafe Staff 5 000
8 050
Cafe Profit 850(1of)
[8]
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Page 5 Mark Scheme: Teachers version Syllabus Paper
GCE AS/A LEVEL October/November 2010 9706 21
UCLES 2010
(c) Schubert Music Club
Income and Expenditure Account for the year ended 31 December 2009
$ $
Income
Subscriptions 2 800 (1of)
Life Subscriptions (4 000 / 20 = 200) + ((6 500) / 20 = 150) = 350 350 (2)
Cafe Profit 850 (1of) 4 000
Expenditure
Competition cash prizes 6 000 (1)
Sundries 2 500 (1)
Bad debts 100 (1)
Depreciation Clubhouse 2 000 (1)
Depreciation Equipment 1 000 (1) 11 600
Deficit (7 600)
[9] (d) Increase membership Increase subscriptions Encourage life subscriptions Social events Or other relevant suggestions (3 2 marks for analysis) (1 plus 1 for development) [6] [Total: 30] 3 (a) (i) 120 000 (1) / (6 (1) 5 (1)) = 120 000 (1) units 120 000 $6 (1) = $720 000 (1of) [6] (ii)
$ Selling Price 6 Variable Costs 5 Contribution per unit 1 (2 c/f)Quantity 200 000 200 000 Fixed Costs 120 000 (1) Profit 80 000 (1)
[4] (iii) Margin of safety = 200 000 (1) 120 000 (1of) = 80 000 units 80 000 / 200 000 (1) 100 = 40% (1of) [4]
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Page 6 Mark Scheme: Teachers version Syllabus Paper
GCE AS/A LEVEL October/November 2010 9706 21
UCLES 2010
(b) Profit / volume graph for product D946
[4] (c)
D946 D947 D948
Selling Price per unit 6 9 13
Less Variable Costs per unit 5 10.50 10
Equals Contribution per unit 1 (1.5) (1) 3 (1)
Number of Units 200 000 50 000 (1) 30 000 (1)
Equals Total Contribution 200 000 (1) (75 000) (1) 90 000 (1) 215 000 (1)
Less Fixed Costs 240 000 (1)
Equals Profit / Loss (25 000) (1)
NB Total figures, that is total sales and total variable costs, are equally acceptable [10] (d) All three products should not (1) be produced. D947 should be eliminated as it has a
negative contribution (1). [2] [Total: 30]
120 (1) or $720
120 (1)
Loss
Profit
80 (1)
000 Units 200 (1) or $1200